JUST DUCKY MUNCHKIN MAKES BIG MONEY FROM BABY AND PET PRODUCTS.

Byline: Brent Hopkins Staff Writer

NORTH HILLS - Based in a hockey rink packed with striking artwork, selling goods for your baby and for your pets, Munchkin Inc. doesn't feel like a regular company.

It summons its workers to meetings using a stadium buzzer and posts its financial goals on an old scoreboard. At the end of one of its doorless corridors, there stands a baby bottle the size of a linebacker, bearing the Dr Pepper logo. In the conference room, there's a sculpture of a nude man carved from wood, standing across from a wall full of childproof cups, bibs and SpongeBob SquarePants paraphernalia.

This is the place where men and women labor to make the ``world's best'' rubber ducky. That ducky will help the privately held company make $60 million this year, a 25 percent growth rate over 2004.

``We believe it's the little things that make a difference in our business,'' said Doug Gillespie, whose business card calls him the head marketing munchkin. ``It's not just a rubber ducky. It's a rubber ducky that tells you that the water's too hot.''

And if that rubber ducky, designed to signal parents with the word ``hot'' when bathwater's unsuitably warm, isn't fancy enough, Munchkin makes a model dressed up like a firefighter. With gadgets like that, the 14-year-old company hopes to become like Apple Computer for the infant set. In a retail climate in which most manufacturers focus on producing simple goods to sell at the lowest possible price, Munchkin makes items that cost more and do more.

It doesn't just make the spill-proof cup. It makes the spill-proof cup that you can freeze like a beer mug. It doesn't make a teething ring. It makes ones incorporated into stuffed animals that give the baby something to play with. Its baby bath is a giant inflatable yellow duck that quacks on command and, like its floating cousin, signals when the water's too warm for sensitive baby skin.

After that approach proved successful, the company ventured into the pet world last year with its Bamboo division. Using the Munchkin method, it makes things like nail trimmers with built-in styptics to staunch bleeding and heavy-duty chew toys that Fido can't feast on.

``If you have an angle, like the blanket with the pacifier attached, that's something I haven't seen anywhere else,'' said Stevanne Auerbach, who edits DrToy.com. ``They seem to have a niche.''

That niche has landed them in such mass retailers as Target, Wal-Mart and Kmart, a presence the company hopes to augment with more accounts in drug and grocery stores in coming years. It's set to hit $100 million in revenue within two years, based on bath and feeding products either created by its 75 employees or refined from existing designs.

Each of those employees, from stockroom clerks to top executives, has a vested interest in coming up with new designs. Anyone who suggests a unique patentable item gets a $10,000 bonus. Improving one of the 175 items Munchkin manufactures gets them $1,000.

All in all, it's a very unusual workplace. Even the president and chief executive officer, Steve Dunn, kept what he did for a living under wraps at first.

After earning an MBA from Harvard, he made his money in the venture capital world before chucking it all to start a business that put him into competition with the likes of Gerber and Playtex, corporate giants who dominated the business for decades.

``Much to the chagrin of my venture capital friends, I quit my job and started a baby bottle company,'' Dunn recalled. ``For a while I kept that to myself, because when you graduate from business school, you don't think you're going to tell your friends you're going to be running a baby company.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

CAPTION(S):

3 photos

Photo:

(1 -- color) Doug Gillespie, the vice president of marketing, holds up the quacking duck tub made by Munchkin Inc. for baby baths.

(2 -- color) Products from Munchkin include a ducky wearing a firefighter's hat, upper left, that can measure bathwater temperature, and a new item, The Cupsicle, right, an insulated spill-proof drinking container that can be frozen.

(3 -- color) Workers move boxes of items at baby and pet product company Munchkin Inc.'s warehouse in North Hills.

Andy Holzman/Staff Photographer